More details about Undeveloped’s blockchain: Domain Automation Network (DAN)

In the past months, Undeveloped had many conversations with other industry players, but no real commitments have been made by other parties to actually make DAN an industry powered Domain Automation Network.

Undeveloped has decided not to launch their own cryptocurrency, called the Web coin. Later down the road they still might introduce the Web coin, however for now, the legal implications of doing so wouldn’t be worth it. Also, because they are currently limiting the use of DAN to the Undeveloped marketplace only, they don’t need to have a security coin in place and no reason to collect transaction fees either.

Here is what Undeveloped announced today:

In our last blog post about DAN we invited the domain industry to join us in our endeavor to build and launch DAN.

In the past months, we’ve had many conversations with other industry players, but no real commitments have been made by other parties to actually make DAN an industry powered Domain Automation Network.

Regardless, based on the feedback we’ve received, we believe that our industry is now well aware of the added value that DAN will introduce and later down the road we still might open up the network to ICANN, registries, registrars and other domain marketplaces if we wish to.

At Undeveloped we strongly believe an ‘Uber moment’ is inevitable for the domain industry and this deduction has been observed and validated by other significant industry players as well.

I believe that new technology like blockchain will pave the way for new and more efficient models and processes to arise and therefore we haven’t permitted any further delays and have started the development of DAN, 100% funded by Undeveloped already in Q1 of 2018.

Undeveloped has teamed up with Unchain which has over 10 years experience in enterprise blockchain projects across multiple industries to accelerate the development of the first entirely in-house built blockchain, specifically designed for the domain industry.

At the moment we’re running final tests of the blockchain in a shadow network before we launch DAN in production. We expect to launch the first fully operational version of DAN in July/August 2018, so it won’t take long before the benefits of the network are made available at Undeveloped.

So what does all this mean for Undeveloped’s sellers? Soon Undeveloped sellers will be able to:

1: Experience a Faster, Frictionless and Safer domain escrow process

Existing domain escrow processes have limited the industry to adopt new models and cause a lot of friction for end-users. That’s why we focus strongly on automating the entire escrow process as this will enable us to introduce innovative new models that couldn’t scale in the existing labour intensive and manual set-up.

The ultimate goal is to offer instant delivery of a newly acquired domain on the secondary market and to merge the primary and secondary market into one unified, efficient and easy to access market with hyper-distribution (Unused Domain Pool) enabled for all available domain inventory.

For most TLD’s we’ll start offering instant transfers when DAN is integrated into Undeveloped, allowing seller payouts to process in minutes for example.

For domain buyers this means that they don’t have to wait for hours, days or in some cases weeks to obtain full control over their newly acquired or rented domain. DAN’s escrow automation component paves the way to bring us closer to our mission to make the BaaS (Brands as a Service) concept a reality.

2: Introducing better Domain Sale/Rental/Lease options

Rent your domains according to a plethora of pre-defined preferences, Allow multiple owners (buyers) to fund a domain purchase, or set-up a Rental/Lease agreement with variables based on performance indicators. Let’s dive a bit more in-depth in the latter:

By working with smart & self-executing contracts, we can introduce new future-proof models that are a win-win for both domain buyers and sellers.

As a seller, for example, you should be able to set a flexible rental fee based on one or multiple pre-defined KPI’s. The rental fee in this model will automatically increase based on the preferred valuation model we’ll make available:

1: you can, for example, set Unique Visitors or monthly Google searches for the main keyword(s) in the domain as the primary performance indicator and automatically then determines the success rate of the company and so the daily/monthly/yearly rental fee.

2: or you can also work with a time-based model where the rental fee increases every 6 months for example.

3: the last example to demonstrate what new possibilities you’ll get would be the opportunity to attach the rental fee to an average rental price index that we’ll publish for the most popular TLD’s. As the index price increases/decreases your rental income will then also increase/decrease according to the industry average.

3: Domain Portfolio Investment Exchange + Dashboard

Most stable domain portfolios will bring in a steady monthly income via sales and domain rentals. Especially when you build out your rental portfolio, you’ll see an increasing fixed monthly income, which makes your portfolio very interesting for investors as you keep the assets locked in the portfolio.

Furthermore, it can be hard to grow your domain business solely on cash-flow so you might want to gain access to additional capital to accomplish your objectives. Or maybe, you’d like to liquidate x% of your total stake in your portfolio to buy a new car or to invest in your own startup.

Powered by DAN, all Undeveloped sellers will be able to start turning their currently valuable but currently illiquid domain asset portfolios into liquid investment portfolios. We expect to be able to attract more capital into the entire secondary market by going in this route which will be beneficial for the entire industry.

Because DAN supports fractional domain ownership, (domains & entire domain portfolios can have multiple legal owners) we’re planning to introduce a simple INVEST function directly on your seller profile if you opt-in to this feature. Investors can then directly and above all remarkably easily take a stake in your portfolio.

Let’s say you’ve sold 10% shares of your portfolio to another (domain) investor. The proceeds of every sale of a domain from your portfolio will then automatically be distributed among all active investors of your portfolio.

A domain portfolio investment dashboard will also offered to our sellers so you can give prospective investors and your current investors access to an overview of how your portfolio is performing.

How DAN can solve other core industry issues as well

The domain industry has been a pioneer in decentralization as it’s one of the first industries that already has had decentralized market features for years (DNS & WHOIS are technically decentralized). So it’s just natural that we, the domain industry, adopt blockchain and introduce one of the first actual implementation of the technology.

However, the world has changed, but the processes and technology in place haven’t. Take GDPR for example, which has introduced quite some new issues for registries, registrars, marketplaces etc. At Undeveloped we propose to build and merge the new and will put an effort in to enable some of the core infrastructure, which forms the backbone of the industry, to be managed by DAN.

We already have reached out to ICANN and proposed a solution to the WHOIS/Domain Ownership Verification mess and how we can utilize DAN to solve some of the new pains introduced by for example GDPR and the reasonable demand for better Privacy by consumers and businesses.

We haven’t heard back from ICANN yet, but we’re hopeful that we can work with them rather sooner than later on a pilot of what we believe is a significantly better way of managing and verifying domain ownership. By implementing a ZK(Zero Knowledge) ownership verification system, we can validate domain transfers for example, without having to share or look into individuals private information.

DAN already solves some issues Undeveloped was facing to offer the models described earlier in this post. For example, with DAN we can have multiple owners of a domain, and we can verify ownership without looking into someones private information. This technology has been built and can replace the current WHOIS backend relatively easily from a technical perspective.

To conclude, one last significant change in our strategy that I’d like to share with you is that we decided not to launch our own cryptocurrency, called the Web coin. Later down the road we still might introduce the Web coin, however for now, the legal implications of doing so wouldn’t be worth it. Also, because we’re currently limiting the use of DAN to the Undeveloped marketplace only, we don’t need to have a security coin in place and no reason to collect transaction fees either. Most likely when/if we make the network available to other network integrators we’ll introduce the Web coin to allow DAN to have its own business model (transaction fee per initiated escrow).